State ex rel. Lake Shore Telephone & Telegraph Co. v. De Groat

123 N.W. 417, 109 Minn. 168, 1909 Minn. LEXIS 441
CourtSupreme Court of Minnesota
DecidedNovember 26, 1909
DocketNos. 16,358—(37)
StatusPublished
Cited by17 cases

This text of 123 N.W. 417 (State ex rel. Lake Shore Telephone & Telegraph Co. v. De Groat) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. Lake Shore Telephone & Telegraph Co. v. De Groat, 123 N.W. 417, 109 Minn. 168, 1909 Minn. LEXIS 441 (Mich. 1909).

Opinion

O’BRIEN, J.

The relator, the Lake Shore Telephone & Telegraph Company, is a Wisconsin corporation, and the owner of a majority of the capital stock of the Zenith City Telephone Company, a corporation also organized under the laws of Wisconsin, and which owns nearly all the [174]*174stock of the Zenith Telephone Company, a corporation organized under the laws of Maine, and operating a telephone system in Duluth, Minnesota, and holding as owner a majority of the stock of the Peoples Telephone Company, a Wisconsin corporation operating a telephone system in Superior, in that state. The legality of these-stock holdings is not questioned.

For the purpose of making its control of the three last-named companies effective, the relator delivered to the president and secretary of the Zenith City Telephone Company a written demand, pursuant to the by-laws of that company, that a special meeting of the stockholders be called. Instead of complying, a special meeting of the directors of Zenith City Telephone Company was held, at which it was resolved not to accede to the request. Thereafter proceedings-in mandamus to compel the calling of the meeting were instituted against F. H. De Groat, a citizen of St. Louis county, in this state, and secretary of Zenith City Telephone Company. After a trial, judgment was rendered that a peremptory writ issue, commanding De Groat, as secretary, to call a meeting of the stockholders of Zenith City Telephone Company for the consideration of the following business:

“First. The instruction of the directors of the Zenith City Telephone Company to take such steps, by way of amendments to the articles of incorporation and by-laws of the various corporations-hereinafter set forth, so that the annual meetings of the.stockholders-of said corporations shall be held in the following order: First, the annual meeting of the Lake Shore Telephone & Telegraph Company; second, the annual meeting of the Zenith City Telephone Company third, the annual meeting of the Zenith Telephone Company; fourth, the annual meeting of the Peoples Telephone Company.

“Second. The giving of instructions to the directors of the Zenith City Telephone Company as to the policy to be pursued in the management of the Zenith Telephone Company and the Peoples Telephone Company.

“Third. The transaction of any business of interest or importance to the stockholders of the Zenith City Telephone Company.

“Fourth. The giving of instructions to the directors of the Zenith [175]*175City Telephone Company, or to any other person to call a special meeting of the stockholders of the Zenith Telephone Company, and of the Peoples Telephone Company, or either of them, for the purpose of amending the articles of incorporation of said companies, or either of them, to bring about the purposes set forth in the first item of business hereinabove set forth, or the making of any other amendments that may be deemed important; also the authorizing of any stockholder in the Lake Shore Telephone & Telegraph Company, or such other person as may be selected at said meeting of the Zenith City Telephone Company, to east the vote upon the stock of the Zenith Telephone Company, .held by the Zenith City Telephone Company, at any meeting of the stockholders of the Zenith Telephone Company hereafter held, whether said meeting be a special meeting or a regular annual meeting, to be hereafter held, it being-understood that there will be presented at the special meeting of the stockholders of the Zenith City Telephone Company, a proposition that the stockholders of the Zenith City Telephone Company at that meeting authorize some other person than its own directors or president to vote the stock of the Zenith Telephone Company, owned by the Zenith City Telephone Company, at all subsequent meetings of the stockholders of the Zenith Telephone Company.”

This appeal is from the judgment so entered.

1. The appellant claims that, under the provisions of section 4556, [Revised Laws of 1905, the writ of mandamus will not lie to compel the performance of an act which is imposed as a duty upon one, not by the laws of a state, but only by a by-law of a corporation. The statute reads that the writ may issue “to compel the performance of an act which the law specially enjoins as a duty resulting from an office, trust, or station.” It was held by the supreme court of Connecticut (Bassett v. Atwater, 65 Conn. 355, 32 Atl. 937, 32 L. R. A. 575) that the office of secretary of a corporation and the performance of the duties of that office constituted, under the statute of that state, an office and trust, within the meaning of the statute regulating proceedings in mandamus, and that such secretary could be compelled to call a meeting of the stockholders of a corporation when a sufficient demand was made upon him, as provided in the by-laws [176]*176■of the corporation. The cases referred to in the note attached to this ■decision, as printed in 32 L. R. A. -575, seem to hold in harmony •with it.

If the Zenith City Telephone Company were a domestic corporation, there would be no doubt as to the propriety of the remedy sought. Subdivision 8 of section 3171, Revised Laws of 1905, gives the district court authority to cause a meeting of the managing-board, stockholders, or members of a corporation to be held, when deemed necessary for the preservation of its property or protection ■of its interests. To this end it is clear that the district court could, in i furtherance of the powers vested in it, compel the proper officer of ■ :a domestic corporation, subject to the visitorial powers of the state, ! to call a meeting of the stockholders; and, while its right to do so may j not rest upon the existence of a by-law providing for a call, the fact! that such a by-law in fact existed would be taken into consideration by the court in determining what its action should be. The writ of ' mandamus is not one of right, but is an extraordinary legal remedy, which the court may use in its discretion in furtherance of justice. State v. U. S. Express Co., 95 Minn. 442, 104 N. W. 556. We do not think that, even in the case of a domestic corporation, the existence of a by-law providing for a meeting upon demand of a certain number of stockholders deprives the court of its discretion in directing a mandamus to compel an officer to call a meeting; but we have no doubt that the remedy is a proper one in the case of a corporation ■organized under the laws of this state.

2. If the act sought to be compelled amounts to the regulation of the purely internal affairs of a foreign corporation, the courts of this state will assume no jurisdiction of the subject. Guilford v. Western Union Tel. Co., 59 Minn. 332, 61 N. W. 324, 50 Am. St. 407. The relator insists that the desired action does not fall within' this rule; that it, as the owner of the majority of the stock, has! a clear right to insist that the secretary of the corporation, a citizen1 and resident of Minnesota, perform the duty imposed upon him by the by-laws; that this is not a regulation of the internal affairs of a. corporation, as the court is not called upon to say what the ultimate action of the stockholders must be; that it is analogous to the sitúa-, [177]*177tion wliere, although the court will not attempt to control the discretion of an officer, it will compel him to exercise the discretion with which he is vested.

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Cite This Page — Counsel Stack

Bluebook (online)
123 N.W. 417, 109 Minn. 168, 1909 Minn. LEXIS 441, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-lake-shore-telephone-telegraph-co-v-de-groat-minn-1909.